One of the more interesting parts of the new Banking Act is its abolition of the requirement for the Bank of England to issue a weekly financial return. Combined with a certain BBC journalist's rational desire to get ahead, it was the knowledge that the Bank of England would eventually have to fulfil its weekly compulsion to tell the world what it was up to that was the chief cause of the Northern Rock bank run.

Theoretically, removal of the weekly return requirement allows covert intervention into the banking system, and may possibly be used by the Bank to prevent future bank runs. This would let the Bank better fulfil its role of ensuring financial stability – thereby serving the public good, rather than that of Robert Peston.

An objective function can be defined as the relationship between an economic actor's personal wants. Like every rational economic actor, and subject to certain economic constraints, Peston aims to maximise a personal objective function. His function includes name recognition, high remuneration, winning journalism awards and possibly also journalistic credibility (although this is debatable). The problem is that he hasn't had many constraints of late.

When someone at the Bank of England (or the Treasury?) leaked to him that Northern Rock was turning to the Bank for support, Peston rationally decided to reveal all to the public in the BBC's Thursday 13 September 2007 evening broadcasts. Peston argues that it was in the public interest to do so. This is debatable. What is clear, however, is that it was a good way for him to maximise his objective function. The leaker likely figured that news of the intervention would be made public anyway through the weekly return, so decided to jump the gun and talk to Peston much earlier. But it was quite clear to anyone who has studied any financial history that a bank run would ensue. Indeed, I was waiting at the entrance to my local Northern Rock branch early on the Friday morning to watch the queues as they started to form.

The big question is this: would the run have occurred without Peston's broadcasts? Well, the Bank of England's weekly return for Wednesday 19 September 2007 would have noted a large increase in the "other assets" category of its balance sheet – as it did anyway – implying a large emergency loan of some sort had been granted to someone. However, it would have been unknown from the return to whom it was made. An even larger systemic run may therefore have ensued affecting all UK banks, as depositors wouldn't have been able to tell banks apart. This, of course, would not have been a very desirable outcome.

So was Peston providing a public service by confining the run to a single institution? The 19 February publication date would have granted central bankers almost one week's reprieve. This would have been plenty of time for Bank governor Mervyn King and his staff to read up on the causes of historical bank runs and thus urge the Treasury to immediately extend deposit guarantees to 100% of all Northern Rock deposits.

Peston's broadcasts of his insider information meant that the Bank and the Treasury could only react to the run and did not have the time to proactively prevent it from occurring. A bank run could have been quite easily avoided altogether.

The weekly return requirement that has now been abolished was first introduced by the Bank Charter Act of 1844. The Bank of England was then a very different institution: it was a privately held joint-stock company whose shares traded on the London Stock Exchange, it had an extensive national branch network and it only had a monopoly over the issue of banknotes within a 65-mile radius of Charring Cross. The 1844 return requirement was designed to inform Bank of England investors of its commercial banking operations and was thus an early type of corporate transparency mechanism. Its abolition seems like a sensible policy solution that may permit the knowledge of future interventions to be temporarily shielded from the public.

The Treasury's impact assessment for the new act argues that there are "no significant risks" attached to this part of the new legislation and that the abolition's costs to society are "negligible". This is not entirely correct. There are significant risks and it may have little impact on the Bank of England's ability to intervene. What may happen in future is that banks will instead themselves issue weekly press releases informing their investors whether or not they have recently sought Bank of England help. If a particular bank does not, press rumours about its financial stability may ensue, thus causing a run. The stigma attached to seeking the Bank's help may prove unsurpassable. We will have to wait and see whether constraining Peston's ability to maximise his personal objective function creates other problems elsewhere.

Peston has been blamed by many others for the Northern Rock bank run, most notably by members of the Treasury select committee. (Others have interesting ideas that the Treasury engineered the bank run itself in order to nationalise Northern Rock on the cheap, using Peston merely as a pawn.) Peston, of course, has vigorously defended his actions.

Peston's reactions to committee members suggest that he thinks he is being blamed personally for all of Northern Rock's problems. Like the committee, I am not arguing this at all. The roots of Northern Rock's woes quite clearly lie elsewhere. I am instead arguing that he had a role in causing sufficient panic among depositors for them to run on their bank. A defence that he didn't know he would cause a run is not a very good one. Accepting prestigious awards for causing a bank run is, in my opinion, disingenuous.